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Adopt global best business practices

Adopt global best business practices

Best practice is the process of finding and using ideas and strategies from other companies and industries to improve performance in any given area. Business has used best practice bench marking over the decades and realized billions in savings and revenues in all areas of business operations and sales.

‘As-Is’ best practice addresses or includes the present practice followed by the specific company which is planning to implement the changes required to keep itself in the league of other top companies in the industry. This is done in all functional areas like HR, Operations, Finance, and Maintenance. etc.

‘To be’ best business practices are generally the best practices which exist in the industry and have been refined over a period of time. Companies should aim at adopting their industry specific best practices for their future benefit. Preventive maintenance, activity-based costing etc. are considered as best practices.

‘To be’ best practice includes some of the practices which are already adopted globally and are taken as industry standards for swiftly operating businesses in a competitive global scenario.

Also Read – Significant changes in business after using cloud ERP software

Some of the best practices that can be adopted are as follows:

Information Liquidity

Much like cash liquidity, the liquidity of information is a measure of business success. In a successful company, data flows smoothly and information is transformed into economic value. Information liquidity is obtained by integration of processes and systems at all levels. Integration should be the driving force behind design, methodology, development and deployment of all IT systems.

Availability

As most companies become more and more dependent on IT, it is very important to ensure the maximum availability of the eservices. This does not mean that all IT systems have to be absolutely flawless and foolproof, but good through has to be given to what could be the consequences for the company if all or part of the IT services are temporarily unavailable, and what can be done to minimize these consequences.

Agility

Market changes constantly and so does legislation and technology. It is said that the product life cycles and their time to reach the market are getting shorter and shorter. As a consequence, IT systems have to be built for maximum agility. Cross-compatibility, reuse and lightweight functionality are the ideas to be considered.

Costs

Especially in times of economic slowdown, the costs of IT are under constant scrutiny. Unfortunately, it is very difficult to quantify the benefits of IT in terms of money and it is relatively meaningless to approach IT investments singularly from an accountant’s point of view. These costs also have to be related to non-quantifiable benefits for the company.

Also Read – How ERP software is beneficial for pipe manufacturing industry

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ERP growth is skyrocketing

ERP growth is skyrocketing

Demand for Enterprise Resource Planning (ERP) solution growing day by day. Experts are forecasting a huge growth of demand for ERP mostly in mid-sized organizations. The demand is due to the specialty of an ERP system to manage the increased customer service, efficient distribution system and reduced operational costs. Majority of CEOs/Senior managers share the same view that ERP is an important tool to achieve competitive advantage.

The number of employees in an organization using the ERP system is increasing and organizations that have started with the basic modules are now expanding their system with subsequent applications. This is also another reason for the ERP growth. Another factor for the growth is many organizations replace customized system with standard application packages.

Most of the medium ERP vendors are targeting the mid-sized organizations. This is because many of the mid sized organizations are working with applications which are non-integrated and on disparate technology architectures, built in-house. This has resulted redundant technology, loss of support, non availability of critical information at the right time resulting in overall business loss. ERP vendors in India have found it an ideal market by exploring the SME segment. There are lot of demand persisted in this market, which on the other hand helped to growth the ERP market in substantially.

Also Read – How web based ERP software helps remote workers

Knowing that majority of Indian manufacturers are small by global standards and requiring easy-to-use ERP solutions to meet their specific process requirements, ERP vendors in India have come out with ideal solutions which can not only match their needs but also their budget. Now almost all small and medium enterprises across industry verticals and micro verticals, such as pharmaceuticals, chemicals, fleet management, automotive, modular kitchen, construction, infrastructure, and textiles, are leveraging ERP solutions to gain sustainable competitive advantages.

With the advent of on-demand deployment of ERP software and also web-enabled ERP solution, the user can access the software through license as a Web-based service. The increasing popularity of the web-based applications account for the ERP growth, as the enterprise resources are maintained by a service provider.

Growth factor also includes the competition prevailing in Indian ERP market. With the entry of international companies in the local market, the local vendors also steadied their products which are going to be a good sign as far as mid-sized organizations are concerned. Now they can find a wider market with ERP product suitable to their needs also in their limited budget. As the market is getting more competitive reliability and compatibility about the smaller players are unwanted. Today SMEs can choose the right ERP at their will with confidence which is, indeed a good sign.

Also Read – What are the future trends for a construction ERP software?

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Make your business process more efficient

Make your business process more efficient

Organizations must realize that after the implementation of an effective ERP system all of its process becomes more efficient. ERP system will help all the major decision making including retaining a client. However, the organization that plans to implement an ERP system must be well prepare to integrate the system effectively.

Organizations are advised to seek the help of an external consultant to find out how suitable is the organization when it comes to working with an ERP system. The external consultants are capable of evaluating and they identify the effective needs of the moment.

It is a good idea if the decision about an ERP project could be carried out by a team of professionals from both internal and external for a more adequate design. This is because the main aim is not just about purchasing software, but to order all the pieces to match with it. In most cases some internal processes need to be redesigned before implementing an ERP. In addition to this, software is often modified to fit the ERP according to the enterprise objectives and activities. The combination must be as perfect as possible.

Also Read – Top ERP Software solution for food industry

In spite of its benefits one of the most important factor to be remembered is that ERP is not a just another software application in your organization. The system involves every internal process and must be preceded by a reevaluation of every section together with its functions. It is also important to note that an ERP will not change the management functioning on its own. You must keep in mind that it is an important and decisive tool, but in order to obtain a correct development you will have to decide carefully who is going to command it, as well as the way in which the data will be saved and how information will flow.

Just implementing an ERP solution alone won’t help the organization make any success. Though the effectiveness of an ERP system could be measured by the improvement in the ROI, the goal of measurement is not to measure; rather, it is to improve performance and processes are the point at which this can be best accomplished.

A well-performed ERP system can be maintained till about 15-20 years. In the later stages the package will have old architecture. It will become very difficult to make changes in the program code without inflicting hazardous damage to the system’s stability. It is possible to give older systems a ‘facelift’ with modern tools. Though those ‘facelift’ can extend the life cycle of the package for some years, they will certainly speed up the appearance of the useless codes.

If your ERP system is under-performing, it is better to go for an overhaul of the system. There are numerous efficient ERP systems available in the market. Do the right evaluation as per your requirement and implement a suitable ERP system that could take your business success to new heights. As the saying goes – “It is better late than never”.

Also Read – The best ERP system for trading distribution business

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ERP is an essential application for business growth

ERP Application for Business Growth

The latest reports shows that majority of the midsize organizations are using ERP to support a variety of business issues, including globalization, lean manufacturing, conducting e-business, consolidation, shared services, collaborating with suppliers and meeting the requirements of new customers.

Further studies reveal that very few midsize companies that don’t already have an ERP implemented are facing numerous problems in their production and sales departments. For those businesses, the reasons to take a leap into ERP, which is largely considered necessary infrastructure for midsize companies, are many and compelling. Many midsize companies cited the availability of low-cost options; pressure from the parent company, suppliers or customers; “explosive” growth; compliance with regulatory requirements; and a “disastrous event” as factors convincing them of the value of ERP.

Just implementing an ERP system alone wont’ do any miracles. To get the most benefits from an ERP application, an organization has to use it to its fullest capabilities. But surprisingly this is not happening with every case. Considering the expense of acquiring and deploying an ERP package, in most of the cases it is being underutilized. As per the available survey reports from the market, the average midsize company uses only about 11 out of 24 generic ERP modules, or approximately 72 percent of the available functionality.

Today the ERP market is sufficiently occupied with some effective and efficient ERP products apart from the more popular Oracle and SAP, that are dominating the market among large global companies. But it’s not an easy fight – several vendors that cater to the midmarket are entrenched, including Infor, Lawson Software, Epicor Software, QAD, Sage Software and Microsoft apart many others.

On the other hand some of underplaying midmarket ERP vendors offers their business-management applications on a modular basis, so they usually can be deployed individually and integrated as more ERP modules are phased in.

What is more important is the investment in ERP solution which should be planned efficiently. ERP is somewhat expensive, and the cost is highly variable depending on the organization. Company size, number of ERP users, the depth and breadth of purchased functionality, and the business benefits gained from the ERP deployment all contribute to the TCO (total cost of ownership) of an ERP package.

As midmarket companies extend their reach into markets around the world, they require increasingly sophisticated systems to support and run their business. With ERP, they can use enterprise-grade technology as a competitive weapon, managing costs, introducing efficiencies throughout the supply chain and manufacturing processes, and streamlining and automating business processes across the organization. For some companies, ERP can mean the difference between success and failure.

Also Read – Benefits of ERP Software in the pharma sector

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Concept of ERP

Concept of ERP

In today’s competitive world many major companies have decided to use a popular tool that has evolved over the past few decades. ERP, the descendant of MRP II offers the “answer” to the economic and productivity troubles of manufacturing and service enterprises. Thus, understanding the basic concept of ERP software is very important.

In order for a software system to be considered ERP, it must provide an organization with functionality for two or more systems. While some ERP packages exist that only cover two functions for an organization (QuickBooks: Payroll & Accounting), most ERP systems cover several functions.

The term ERP originally referred to how a large organization planned to use organizational wide resources. In the past, ERP systems were used in larger more industrial types of companies. However, the use of ERP has changed and is extremely comprehensive, today the term can refer to any type of company, no matter what industry it falls in. In fact, ERP systems are used in almost any type of organization – large or small.

ERP systems today can cover a wide range of functions and integrate them into one unified database. For instance, functions such as Human Resources, Supply Chain Management, Customer Relations Management, Financials, Manufacturing functions and Warehouse Management functions were all once stand alone software applications, usually housed with their own database and network, can now fit under one umbrella

As in any integrated System or Unit, the performance of each one of the parts of an Enterprise has an impact in his cumulative performance results. Specifically, we can say that a 95% performance in independent vital enterprise elements (Item master, Bills of Materials, Production Master Schedule Adherence, Inventories Accuracy, Production Orders Accuracy and Purchase Orders Accuracy), will reflect a cumulative 75% in a ERP environment. This means a percentage of failure possible in productivity terms. Here is where we should support and combine this useful tool with a business strategy based on the desired administration tendency or theory.

On this sense, it is vital to note the point on administration before deciding which ERP solution is the one you will be using, you need to have solid administration principles (no matter which administration tendencies you decide to choose) and strong knowledge of ERP methodology.

This will translate into synergy between areas that will allow organizations to have highly effective processes with a continuous success. Only by creating a deep understanding of this philosophy you will have the certainty of obtaining the best results, as well as being in position to face and take proactive actions for any obstacle you could find in the road. If you have not this reference point, your efforts will deliver the wrong results.

Also Read – Best ERP Software for Manufacturing in India

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Basic features of ERP

Basic features of ERP

Comparing midmarket ERP packages is not exactly an apples-to-apples type of exercise. Each vendor wraps its midmarket offering with different functionality, tailored to the needs of the kinds of companies the solution is intended for and based on the vendor’s particular areas of expertise. [Download ERP Tour]

However, almost every midmarket ERP suite shares several basic features of ERP modules: BI, CRM, financial management, HCM, manufacturing operations and SCM. The differences among solutions tend to be quite granular within these modules. Also, even if different packages offer the same feature – say, sales-order management – it might not be bundled in the same module; some vendors include sales-order management in their CRM suites while others package it in their SCM suites.

Key to an ERP package is tight integration between modules, so that all of the core business modules are related. For instance, manufacturing operations are integrated with customer service, logistics and delivery.

Also Read – Advantages of ERP solution in printing industry?

Basic Features of ERP Software are:

  • Business Intelligence

One of the newer components of most modern midmarket ERP packages, BI shines a bright light into the heart of a company’s performance. In general, an ERP suite’s analytics or BI tools allow users to share and analyze the data that the ERP applications collect from across the enterprise from a unified repository. The end result is more informed decision making by everyone from executives to line managers to human-resources professionals to accountants. A variety of automated reporting and analysis tools can help streamline operations, as well as improve an organization’s business performance. With greater control and visibility of data across the enterprise, business leaders can better align the company’s operations with its overarching strategic goals.

  • CRM (Customer Relationship Management)

CRM has long been a core component of any ERP offering, giving manufacturers a way to improve customer service by pulling together tools to fulfill customers’ orders, respond to customers’ service needs, and often, create marketing campaigns to reach customers. Most vendors include sales tools to provide customers with sales quotes, process their orders and offer flexible pricing on their products. Another important CRM component is service management, which may arm customer-service agents with scripts for talking to customers, as well as allow them to authorize product returns and search a knowledge base of support information. The third main component is usually marketing, which may include tools to manage campaigns, create sales literature and develop a library of marketing collateral. Additionally, CRM often has tools for account management, SFA, and opportunity or lead management, as well as self-service tools for customers and an e-commerce storefront builder.

Also Read – ERP Software streamline the cosmetic manufacturing process?

  • Financial Management

Of all the ERP modules, the financials applications tend to be the most frequently utilized. Across the board, these include general ledger, accounts receivable and accounts payable, billing, and fixed asset management. Because many midmarket companies deploy ERP to support efforts at breaking into global markets, it is imperative that their ERP packages support multiple currencies and languages. The financial-management applications may also include tools for creating and adhering to budgets, cash-flow management, expense management, risk management and tax management.

  •  HCM (Human Capital Management)

For the most part, the HCM module includes tools for human-resources management, performance management, payroll, and time and labor tracking. Some vendors also provide functionality for administering benefits, managing compensation, dealing with salary taxes, recruiting new employees and planning workforce needs. Some also include self-service tools for managers and employees.
Even though HCM is generally considered core ERP functionality, some vendors offer it as an add-on module.

  •  Manufacturing Operations

The manufacturing module is where much product differentiation happens, including industry-specific functionality. In general, these applications are intended to make manufacturing operations more efficient and simple. Most vendors support different modes of manufacturing, include configurable product capabilities, perform different types of job costing and offer a BOM (bill of materials) tool.
Applications often include PDM (Product Data Management), CRP (Capacity Requirements Planning), MRP (Materials Requirements Planning), forecasting, MPS (Master Production Scheduling), work-order management and shop-floor control.

Also Read – How can cloud ERP help solar installers reduce soft costs?

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Failure factors in ERP implementation

Having discussed about the success factors in the previous articles it is time to analyze on failure factors in ERP implementation.

FAILURE FACTORS IN ERP  IMPLEMENTATION :

  • ERP implementation is, at its core, a people project : The biggest challenge before and after implementation is not the technology; the biggest issues are related to people. At every stage, companies must work harder to manage change, secure buy-in, communicate with and educate their employees. Top human resources issues are related to changing management, training and internal staff adequacy.
  • Employee Resistance : If the employees are not educated and informed about the benefits of the ERP system and assured about the security of their jobs by the top management, they will start believing in the rumors that float around and will either resist or sabotage the ERP implementation.
  •  Lack of top management commitment : The top management should pledge and demonstrate that the ERP implementation has its full support. They should assure the employees about their jobs, clear any doubts and explain why the ERP system is a necessity for the organization. The CEO or some senior level manager should sponsor the ERP project in order to demonstrate the management commitment.
  •  Inadequate training and education : All users of the ERP system should be trained properly in using the system to its fullest. Different groups of people in the company will have different training needs. Managers need more focus on the decision-making and analysis features of the system, while the clerical staff need more focus on how to perform their jobs. But all the users must be trained in the ERP basics, overview of the system and its working, how an action by an employee triggers a host of events through the organization, how automation will help, what processes are changed and so on.
    When the employees do not understand what the new system is and what it is supposed to do and how to operate it, they will not use it or use it incorrectly. This can lead to failure of the system. Train process owners (department managers) in how to use the system. Have them train the users.

Also Read – ERP Software in the paper industry

  •  Inadequate requirements definition : If the requirements of the new system or what is expected from a new system are not adequately defined, then the implementation team will find it very difficult to plan the project. Only if the requirements are specified correctly, the ERP package that is best suited can be selected.
  •  Inadequate resources : ERP implementation is a complex, costly and lengthy project. The initial budgets are very often exceeded and there are still many hidden costs in an ERP implementation. So, while preparing the budget and allocating resources for the ERP implementation care should be taken to consider all the factors that could affect the costs, manpower requirements, infrastructure needs and then reserve a reasonable amount of buffer of buffer for any contingencies that might occur during implementation.
  • A poor fit between the software and users procedures : If the selected package is a poor fit then either the organization has to change its business processes or the package has to be customized to follow the organization’s processes. If the company’s processes are efficient and cannot be changed the only option is to customize. This is a time-consuming, costly and error-prone process. So while selecting the ERP package care should be taken to select a package that offers the best fit with the company processes.
  •  Unrealistic expectations of the benefits and the ROI : ERP systems are capable of producing dramatic productivity improvements if successfully implemented and properly operated. But expecting ERP to perform miracles will be asking for trouble. The management and employees should be made aware of the benefit so that there are no over expectations. If ERP is touted as a panacea, then there will be dissatisfaction and disappointment about it, which can lead to failure of the system.

Also Read – Which ERP solution is best for EPC contractors?

  •  Poor ERP package selection : If the right package – the one that is best suited for the company – is not selected, it will create a lot of problems for the implementations and customization teams as well as the end-users and will result in failure. Choosing an ERP package that is not suited for the company or one that will require huge amounts of customization is one of the major factors that contribute to the failure of the ERP project. So the package selected should be one that addresses the basic business functions of the organization.
  •  Extensive customization : Be prepared for people to argue that they need to customize a report or tell you that your new software does not accommodate the way your company pays invoices. However, you should always challenge those arguments aggressively. Most companies can live with standard business processes. When you over-customize an ERP installation, you not only add time and costs, you also make installing the next release of the ERP software increasingly difficult and costly.
  • Change management : Long and expensive customization efforts often result in the lapse of the release deadline and budget overrun. Customizations make the software more fragile and harder to maintain when it finally goes to production. Major changes may be required in the later stage of the implementation as a result of incomplete requirements and power struggles within organizations.
  •  Failure of accommodating evolution of business processes : Business process fall into three levels – strategic planning, management control and operational control. Organizations continuously re-align their business processes at all levels in response to the ever-changing market environment. Many ERP systems are not flexible enough to accommodate evolution of business processes. An ERP system that worked well last year may need major overhaul.

Also Read – Best ERP software for the oil and gas industry

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Make the best use of consultants’ knowledge

Best Use of Consultant Knowledge

  • Implement pre-project readiness assessment and overall project planning: Most organizations have never been involved in a project as complex and cross-functional as an ERP implementation. Additionally, an ERP project requires near full-time participation. A readiness assessment conducted prior to the project kick-off can help identify areas of strength and potential problem areas in need of improvement. This information is extremely helpful when planning the project budget and the project tasks.
  • Implement aggressive project management processes: The magnitude of an ERP implementation requires aggressive and structured project management processes. An ERP implementation is complex and touches virtually everyone in the organization. Without the structure of project management processes and without a project manager who understands this methodology, the project runs significant risk in time, quality and costs. “Go-live” dates could be missed and the credibility of the project team and the ERP software itself could suffer dramatically.

Also Read – Why automotive manufacturers must use ERP system

  • Create a project organization structure to provide planning and quick response for decision-making and issues management: The toughest problems with any project implementation involve people issues. Pre-project planning must include the creation of clearly defined roles and responsibilities. The following critical roles need to be filled by qualified people: project sponsor, project director and/or project manager, functional team leaders, technical team leaders, project coordinator/scheduler, etc. These people must have dedicated time to the project and they must be willing to be accountable for dealing with issues and making timely decisions. Many ERP implementations become paralyzed when issues are put on hold and are not dealt with quickly.
  • Make the best use of the external consultants and experts: These people are paid huge amounts of money for helping you in implementing the ERP system. So you must make the best use of their knowledge and skills and ensure that the knowledge transfer is complete before they leave the project.
  • Teach the organization to use new capabilities: The natural progression from building capabilities is actually using them. While this may sound obvious, many organizations are far better at building new capabilities than at teaching (and motivating) people to use them. Successful companies avoid this fundamental imbalance. For them teaching goes hand-in-hand with building new capabilities, from defining roles to developing skills to culture shifts.

Also Read – ERP Software in Nigeria

  • Implementation review: This review must be performed after users are competent with the system. The goal is to ask the software vendor to suggest better ways to use the system.
  • Assign clear ownership of benefits: During implementation, it is usually clear that the responsibility for going live-on-time and on budget-ultimately belongs to one person, the project leader. But after going live, who owns the benefits that are being targeted? In many companies, this is a difficult question to answer – no one is identified as the owner. But in successful companies accountability for results is no mystery. The owner may be the business unit leader, a project sponsor, a process owner or someone else. What is important is that there is somebody whose responsibility is realizing the benefits.

Read More here – Which is the most common ERP software used in dubai

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eresource ERP 360 – an Enterprise Solution that can take you to new business heights

eresource ERP 360 – an Enterprise Solution that can take you to new business heights

eresource ERP, one of India’s leading and award-winning Enterprise solutions is a web-based business software that is designed to benefit the entire workforce in your organization to work together smoothly and efficiently with one integrated system. eresource offers both Off The Shelf and industry-specific customisable applications to meet the exact requirement of customers’ business process and terminology. You can request for a LIVE DEMO of this economical, powerful and easily implementable web-based ERP system and feel how this application can be helpful to your organization.

eresource, a ERP 360 system provides a lot of working freedom to organizations. Many major organizations as well as as small and medium companies are in our clients’ list. These companies have implemented eresource ERP system as a cost effective alternative to their manual procedures or their piecemeal software applications.

Under-performed legacy system and cost-factor involving the customization of existing outdated ERP systems in many companies are making the business process a time consuming exercise and, in many cases, impractical.

Also Read – ERP for Plastic industry

Keeping with our practice of moving ahead with the changing technology environment, eresource applications are getting updated on on regular intervals. Our aim to provide industry-specific ERP system for every Industrial verticals are getting fulfilled with introduction of eresource Xcel, eresource nfra, eresource Life Science, eresource e-Trade, eresource 3GL and eresource WMS etc. We have also recently developed exclusive system for Accounts and Finance, HRMS, PMS and Excise etc. that are the products that have been placed under our Off The Shelf option.

All our systems have been incorporated with triggers, alerts and workflow procedures that ensures operational efficiency for any business. Being a web-based ERP system, implementation is not a cucumbersome process like in many other ERP packages. All customer-specific functionality has been included in the system effectively. Although eresource ERP systems have been developed in keeping with the Small and Medium Enterprises in mind many large-scale organizations in India and in Middle Eastern countries are opting for eresource today.

Also Read – How cloud based erp software help the construction industry?

The prime reason why eresource is concentrating more on SMEs is that the SME segments are the ignored sector by the large players in the ERP market. However this attitude of big ERP players towards SME segment has helped ERP firms like eresource Infotech realise the need of an economical and reliable ERP system for this sector. And the result is the birth of one of the most flexible and affordable ERP software in India — that is eresource.

It must be admitted that developing such a package was not easy. As everyone knows that meshing the specific needs of thousands of customers into a single coherent package was not that easy. But eresource’s top quality expert to sift through this mature package, incorporating a massive volume of functionality processes as required by the customer. Being a web-based ERP solution, eresource has simplified the implementation process and it brings efficient operational methods and return on investment (ROI).

Also Read – ERP for automotive

In spite of its benefits one of the most important factor to be remembered is that ERP is not a just another software application in your organization. The system involves every internal process and must be preceded by a reevaluation of every section together with its functions. It is also important to note that the ERP system will not change the management functioning on its own. You must keep in mind that it is an important and decisive tool, but in order to obtain a correct development you will have to decide carefully who is going to command it, as well as the way in which the data will be saved and how information will flow.

Just implementing an ERP system alone won’t help the organization make any success. Though the effectiveness of an ERP system could be measured by the improvement in the ROI, the goal of measurement is not to measure; rather, it is to improve performance and processes are the point at which this can be best accomplished.

A well-performed ERP system can be maintained till about 15-20 years. In the later stages the package will have old architecture. It will become very difficult to make changes in the program code without inflicting hazardous damage to the system’s stability. It is possible to give older systems a ‘facelift’ with modern tools.

Also Read – Key benefits of ERP software for the food and beverage industry?

Though those ‘facelift’ can extend the life cycle of the package for some years, they will certainly speed up the appearance of the useless codes. If your ERP system is under-performing, it is better to go for an overhaul of the system. Do the right evaluation as per your requirement and implement a suitable ERP system that could take your business success to new heights. As the saying goes – It is better late than never.

Mail Us at sales@eresourceinfotech.com for Live ERP Software Demo